Thousands of years ago, we sat by the fire and told stories. We told stories to remember, to learn, to connect, to entertain. I sat next to you and listened. There was no word for genres because there weren’t enough genres for a word to have been invented.

Now we have so many – the song, the poem, the book, the movie, the TV show, as well as the email, the infographic, the blog, the tweet, the status update, the clip, the app, the game. Each has its own set of affordances – the possibilities presented by the properties of the thing. A song plucks at our heartstrings, in an almost physical way. The poem takes us out of our rational, everyday selves. The book gives us time to think deeply. The movie envelops us in its stories. The TV show lets us live with and revisit familiar beloved characters. In the same way do our more modern genres have their own set of affordances (and creative challenges as well – a potential topic for a whole other post).

We have so many genres today than we ever did before. We also have myriad permutations of genre combinations, e.g. the clip in the blog, the game that is almost a movie. The tyranny of genre is over. And they are more readily accessible than ever. Unlike the opera, a YouTube clip doesn’t require a $100 ticket and ballgown. Mass digitization, with the cost of bits dropping to near-zero, makes these new genres virtually free.

One side effect is that the competition between genres is becoming more efficient. Nearly every piece of work has some purpose, whether it be to convey, convince, evoke, or simply entertain. Creators will seek to optimize for that purpose. Most creators also seek an audience for their work, and with the increasing scarcity of attention, they will gravitate towards genres that – given the story or content “stuff” – offer the most net value to the audience (relative to the cost of their attention). As a result, songs are becoming catchier through science, TV shows are becoming more character-driven, books are becoming shorter, long-form journalism is being curated for quality, games are becoming more engaging.

Will this ever be perfect? No. But while the creator has more options among genres, the world has more options to shape the content as well. We see whole books summarized into essays disguised as reviews, with people reading these reviews in lieu of reading the book itself. People are watching long trailers instead of the whole movie, reading recaps instead of watching a TV episode, watching gameplay instead of playing it themselves, reading tweets from a conference instead of attending it. The market for content has more than one side.

As defined by that consistently roughly-accurate resource, digital exhaust is:

“The output of human beings using the internet.

The"aggregation of [consumer] data through the digitization of processes and activities" in the commercial sector which generates metadata supporting corporate profit generation.

The production of vast amounts of information in binary code, represented as words, texts, videos, photos and other mediums, expressed on computers and websites, and distributed across the internet.

The individual representation of a person using the aggregate of their past interactions on the internet.”

What fascinates me is that digital exhaust is only a subset of our information output that is captured and made potentially usable by the medium. But we throw off personal exhaust all the time. When we are seen, when we are heard, when we could have been seen and could have been heard, when we leave traces in the world…which we can’t help doing, even when those traces are virtually indetectable by us, today, with our current technology. Undetected today doesn’t mean undetected tomorrow. Indetectable today doesn’t mean indetectable forever.

And the trendline does not seem to be going in the direction of greater individual privacy, offline and online. Personal exhaust is the individual representation of a person using the aggregate of all past behaviors and choices. In a sense, it is the “stuff” of our identity– we form the masterwork of how we see ourselves by placing our own artistic imprint and interpretation on this “stuff.” In the same way, other people form their perception of us using the subset of “stuff” about us available to them, and placing their own imprint and interpretation. And of course, there’s this back and forth dance where I know that you know that I know that you know, and we tweak, act, live.

Our personal exhaust has always existed but so little was ever captured. For the first time, the trajectory of information capture is making it relevant. What does it mean for us? How do we use it? How will it change our behavior? And how will it reshape our identity? It goes beyond the new businesses that will emerge or the adaptation of individuals to this new paradigm. I don’t know what the future holds but I have an inkling as to the tremendous power of identity. In my mind, the surfacing of all our personal exhaust has the potential to redefine our society as a whole, how we interact with each other, and shake the foundations of our institutions.

At the very least, it will redefine leadership. Forgive me for beating this dead horse again, but in a world where relationships are becoming more important, and relationships having always been based on trust – defined as the intersection of past evidence and future extrapolation – then strategy dictates that you consider your personal exhaust and be trustworthy. Leadership based on charisma alone is over. It was a bullshit strategy that only ever worked because of asymmetric information. Times are a-changing.

“Google, enormously successful in online advertising, might be casting an envious eye toward the $150 billion-per-year pay television market. Such a venture has the potential to turn today’s business of television advertising and distribution upside down.”

“Google’s negotiations with content creators could also give Google TV an advantage it has never enjoyed before, where the biggest weakness of the company’s potentially groundbreaking TV service was the lack of cooperation of content creators."

This situation highlights a tension here for Google that can be seen through the lens of trust. In an article I wrote several years ago on the Economics of Trust, I said that Google has historically invested in trust on four dimensions:

“Sustaining a trust strategy is particularly challenging for companies seeking growth….Google’s stated mission, to organize the world’s information, was originally viewed as a high-flying pipe dream, but companies that are in the business of selling information are no longer smiling. Google’s future growth may well be tied to the willingness of partners to cut through the red tape in negotiations and join coalitions. It remains to be seen what will happen as the company’s size and scope threatens former allies.”

For potential partners, it’s a balancing act. Google is a very attractive partner in the short run. But in the long run, it could be game over, i.e. “Google won’t screw me over – that is, unless and until they screw me over completely.”

For some of those partners, however, there is no other viable alternative. It’s like chemotherapy – they hope they can survive the cure. And at least it buys them time.

"Nearly half of Chinese millionaires are thinking about leaving the country, while 14% have or are in the process of applying for emigration, according to a Hurun Research Institute and the Bank of China report.""Where do China’s millionaires want to move? North America is the top choice. The United States is the most popular immigration destination for Chinese millionaires, attracting 40% of the respondents who are interested in leaving China, followed closely by Canada (37%) followed by Singapore and Europe.

Half of the investors said they want to leave for better overseas education opportunities for their children. About a third invest abroad as a step toward emigration, while a quarter of them do so to diversify and manage risk.""We see too many worried entrepreneurs nowadays who are afraid that they would end up in prison for offending Chinese officials,” Beijing-based scholar Hu Xingdou told Ming Pao, a Hong Kong newspaper. He believes the lack of legal protection in many areas has lead to the worsening of business environment in China, which is accelerating the emigration drive."--Patterns of Emulation among Social StrataSocial practices tend to percolate from "upper strata" to "lower strata"In accents / linguistics...http://en.wikipedia.org/wiki/Prestige_(sociolinguistics)"Gumperz also observed that the lower prestige groups sought to imitate the higher prestige speech patterns, and that over time, that had caused the evolution of the prestige away from the regional standard, as higher prestige groups sought to differentiate themselves from lower prestige groups."In child names...http://www.slate.com/articles/business/the_dismal_science/2005/04/trading_up.html

Excerpt:"I wrote this in February 2010: "We would do well in the US to consider how to manage the inevitable devolution of power in a stable and strategic way. Decline of nation power doesn't necessarily need to mean decline of the power of our values." There are myriad reasons for the United States to abide by its own values, many of them moral, but this is strategy. America has a cultural advantage that largely goes unrecognized or at least overly romanticized - our values, even when we betray them, are fundamentally about unlocking the potential and meaning of the individual life. Life, liberty and the pursuit of happiness. Whether you agree or disagree with this individualistic bent, it is attractive enough vis-à-vis other value sets to bring flocks of foreign graduate students to our shores. In a transparent world with widely distributed power, the power of pull will be - to an increasing degree - all that remains. How will we pull in the inventors, the students, the philanthropists, the activists, and yes, the hackers?"

(a) What is the right team build?(b) How do you shape the environment around them and equip them?

As a reminder, what we’re trying to do here is optimize the following – (1) starting as wide as possible, (2) narrowing down as best as possible, and (3) doing it as fast as possible. Ah, yes, and (4) executing on the result set.

All this happens in the context of a team – whether it be a small shop or the billion-person gargantaur. You want a team that is highly effective at the following:

(1) Brewing – “starting as wide as possible”

Brewing is about inspiration, drawing a wide net, making connections between seemingly unrelated things. It is about more than the classic wacky creative – it is about diversity of thought, intellectual curiosity, lack of ego. It is the freedom, the courage and the will to reach out into the world beyond the easy arena by taking a trip, doing site visits, talking to different kinds of people, following them around until you can get in their heads. It can be starting a conversation or community on an industry message board, Quora, Twitter, Facebook or custom mobile ideation platform. It is about, at times, branching out into realms that may seem irrelevant, and avoiding the temptation to control when the cost of branching out is low.

Steve Jobs, while not the greatest example of a egoless individual, was a great example of the power of curiosity. He studied calligraphy at Reed, which resulted in multiple typefaces and proportionally spaced fonts on the Mac. He loved and invested in the art and storytelling of animated shorts, which turned into the wildly successful Pixar powerhouse. When I heard his speech at Stanford about the dots only connecting looking backwards, I thought two things. First, that everyone’s dots connect looking backwards because we all live in time and learn throughout that time. Second, that Steve Jobs’ dots probably have a more intricate pattern because he has a large portfolio of disparate dots.

I will emphasize that brewing is embodied in the group, not the person – no individual has more than a “personbyte” of information in them. The group's culture must offer space for different thinking, and recognition and validation for even those ideas that don't get carried forward - an environment where "no" is never heard but rather "yes" is said to a few ideas in a growing pool. An individual can be, however, the touchstone for reminding the group to throw its arms wide – whether that individual is the connector, the polymath, or the ethnographer.

(2a) Whoing – “narrowing down as best as possible”

There’s no one right model for innovation. Each problem is different. As I have mentioned before, a problem is about people. No problem exists without a holder (or many holders). While the average strategist might look for patterns, the great strategist will develop a deep empathy for the problem and the people around it, an empathy that is accelerated by the patterns they have seen.

It is impossible, full stop, for a team to do great innovation without a deep empathy with the end-user.

That means dropping out of the “I know” school and enrolling in the “I don’t know” school. Unless you are both a sector specialist and a long-time member of the core user base, you have to start with humility. In all my time looking at markets and industries, I’ve never encountered one that didn’t have unique grooves and curvatures, its own thumbprint. And in my opinion, people are far more nuanced and complex than any market or industry.

What are the nuances of the problem? How does this sector work, what are the dynamics? Where are the bottlenecks? What has been tried in the past? What is missing from all previous solutions? What has kept this problem from being solved to date?

What is it that drives them, the holders of this problem? If your answer is features and cost, then you’re missing the point. Is it saving time because their lives are so hectic and they want to spend more time on their family and passions? Is it status or recognition amongst their peers? Is it deeper relationships, a more connected network? Is it the fun of a meaningful challenge? Is it the inspiration of an absorbing piece of art?

Empathy is about standing in their shoes, viscerally. You can get lucky sometimes, with an insightful user coming up with a great idea, but you can’t always ask users what they want and get a good response. You have to get to the point where you respond emotionally, in your gut, the same way the user would. Only then can you make something great.

(2b) Hewing – “narrowing down as best as possible”

The Oxford English Dictionary defines “hew” as to “make or shape by cutting a hard material such as wood.”

In innovation, the ideator is the sexy role, the equivalent of lead singer in a band. The facilitator is at best relatively unappreciated, and at worst, denigrated as “process.” Great facilitation is about more than process – it is about progress, and the right kind.

It is about knowing good analysis from bad, drawing real insights from both the numbers and market reach effort, calling upon deep sector specialist knowledge, factoring in costs and resource constraints, obviating the group’s tendency to leap to the answer, holding a seemingly crazy idea in play until the “why nots” are thoroughly answered, and managing all the personalities in the room. It is strategy on your feet, and hard.

It’s also about prototyping, testing, iterating, learning by doing. This is particularly useful now when prototyping – software or hardware – is relatively cheap. When the discussion begins to run in circles, you can break free by placing yourself and your team under the rigor of having to make something. As Joi Ito has said, plan by building.

Finally, depending on the problem, it can also be about designing platforms and protocols to enable the billion-person gargantaur to narrow down the pool for you. It could be voting, decision markets, epic contests, wiki-likes, collaborative gaming. Or taking the ideas of many and doing the time-consuming work of organizing and shaping them.

The “how” is not random – it is implied by the nuances of the problem and the characteristics of the people around it.

"In every block of marble I see a statue as plain as though it stood before me, shaped and perfect in attitude and action. I have only to hew away the rough walls that imprison the lovely apparition to reveal it to the other eyes as mine see it." —Michelangelo

(3) Gluing – “doing it as fast as possible”

“Happy families are all alike; every unhappy family is unhappy in its own way.” -- Leo Tolstoy

I have a degree in math and spent a lot of time in my early years programming (in Basic, Turbo Pascal and C++), and really only in the past 7 years has my appreciation for the power and complexities of people truly blossomed. One of the best things I ever did – despite a short-term negative ROI – was take a year off to study organizational and social psychology.

It helped me understand that the scarce commodity in an organization – the bottleneck to success – is rarely a held asset, technology or particular expertise. These or some substitute are often acquirable (and should be acquired if needed). The scarce commodity, however, is most often the coherence and cohesion that creates an effective organization. Call it what you will – culture, communication, shared language, collaboration, integration, silolessness – it is that magic that permeates a great organization that results in people talking to each other, intuitively understanding what each other means, sharing knowledge, and driving towards common goals.

Creating this magic is three-part. The first part is about leadership. The experience of living through the politics of 2001 through 2009 should have disabused us of the notion that leadership doesn’t matter. Leaders choose values and a shared language, and reinforce it every day and in every action. They also craft strategy and align the structure of the organization to match. They are responsible for the coherence side of the equation.

The second part is about human relationships. The idea that people can separate the personal from the professional has proven to be crap. Anyone that has spent time in an organization knows that the best professional relationships stem from healthy personal relationships. Relationships are built on trust and information, which may include but don’t necessarily require rich face-to-face interactions. If the individuals in your group don’t know each other or don’t like each other, then productive innovation is insanely hard.

The third part is protocols. Terribly boring-sounding, which is the reason why it gets underplayed in the innovation realm where sexiness often is equated with novelty. Protocols in a team exist for two reasons: managing uncertainty and maintaining relationships. They are the “handshakes” that make the team (or gargantaur) run smoothly. Examples of protocols can be how conference calls are conducted, expected punctuality, how invitations for meetings are sent, how requests for information are made (and the implied respect for the counterparty’s time), the level of responsiveness expected, how vacations are communicated, how action items are distributed and individuals are held accountable, the format for opening and closing an email, the use of emoticons when feedback is given, and the care given to thanking others. Even large communities, such as Wikipedia or open source, will adhere to agreed-upon guidelines. They can be explicitly established or emerge organically but will fold into culture only if proven useful. These are the nuts and bolts of any organization, though they somehow seem to go by the wayside more frequently in groups that call themselves innovative. Despite the existence of protocols, however, individuals can still feel free to “ignore all rules.”

By all means break the rules, and break them beautifully, deliberately and well. That is one of the ends for which they exist. — Robert Bringhurst

The code is more what you call "guidelines" than actual rules. — Captain Barbossa

(4) Doing – “executing on the result set”

This post is about “Productive Innovation,” not just having an idea, but concretizing it into something whole, (almost) tangible and valuable. You can’t stop at idea selection and strategy, at the water’s edge. Or even at prototyping. The world is not changed through a prototype.

The capabilities to roll out an innovation and put it in the hands of many do not have to sit in the innovation team (though it could). But they do need to exist somewhere, and there needs to be a clear lifecycle, a long warm handshake, a defined roadmap and an owner with the drive, knowledge and resources to make it happen. I leave this to the end and give it short shrift here but I cannot emphasize enough its criticality.

I’ve come the long way around to answer the two questions we have in mind. So just optimize the above and put together a great team build and well-lit greenhouse. Easy, right? :)

The real takeaways here should be in the questions that you ask – of yourself and of the individuals you are considering for your team. Avoid the temptation to hire one person per desired outcome, and craft the team in its entirety. While each may bring a different skillset, every member should have at least the capacity to empathize deeply with the user and be a functional member of the team, able to generate both trust in their competence and trust in their integrity. Disparate viewpoints and skillsets are important – analytical and intuitive, macro and micro, thinking and doing, senior and junior – as well as the capacity to bring those viewpoints together and make progress. Fun!

The future is in coordinating personbytes of knowledge: It’s hard to get knowledge into people. Each person only holds a personbyte of knowledge, which represents an enormous coordination problem in a peoplebyte world. This problem of coordination is addressed through organizations and networks.

Diversity is incredibly powerful in an increasingly uncertain world: Diversity results in a larger possibilities set and generates creativity from productive friction – if you can mitigate the coordination costs of diversity, either through empathy or technology. Competitive advantage comes from learning faster than everyone else. Across countries, diversity is predictive of economic success and future growth.

A nonzero-sum game culture can motivate people to collaborate – a well-designed game oriented towards common objectives can create a framework for mutual collaboration.

Control inhibits adoption: Open source works because it’s not just altruistic – it spurs adoption and allows technology to cross the chasm. A lot of great technology dies because there’s too much control.

Importance of humility in open innovation: Open innovation is not top-down. You lead by being custodian of a process. You never say you're running something or someone works for you. You credential yourself by being effective, which works because the world is becoming increasing transparent.

Formal authority is not the same as influence: In analyses of networks, the most influential person was often a lower-level manager who worked across functions and offices. Relationships drove influence in an organization more than seniority. People gravitate to those they have met face-to-face with.

Ecosystems rather than monoliths: In a world of complexity and where the future is unevenly distributed, you don't try to understand the whole thing. One person cannot understand the whole system. Solutions that emerge are "small pieces loosely joined." You throw away your well-drawn map because it inhibits serendipity. When you embrace the "power of pull", you are allowing yourself to "get lucky." Serendipity is not randomness – it’s an approach to managing the randomness in the world.

Technology can supplant process: Technology can perform some of the same jobs that process used to. For instance, it can help manage accountability through visibility, as opposed to structured oversight.

Innovation has become cheap, so we can “plan” by building: Because of the declining cost of innovation, you can now "plan" by placing yourself under the constraint / rigor of having to make something. In big conservative Japanese companies, the feasibility study can cost more than the project, which makes no sense. In a way, the “power of pull” is the ultimate just-in-time strategy.

Hardware innovation is tracing software innovation: It’s “hardware as software” – there’s embedded knowledge in hardware that is subject to the same explosive forces as the software innovation of the past two decades. Hardware innovation is advancing extremely quickly right now in informal groups and communities.

Leverage local hubs with existing real communities – there’s a temptation to address the large busy hubs in an organization or network but “demand” for resources and bandwidth in the busier hubs is often greater than supply.

Emotions are contagious – both negative and positive. It is hard to happy and productive when you are surrounded by people who are not. Human networks are designed to magnify the things they are seeded with, good or bad.